Future of ERP

There are two aspects of ERP that make that solution among the stickiest in the industry (meaning least likely to be changed out); cost and disruption. Said another way, both relate to the difficulty in implementing the types of systems. In my 30 years within the industry, I have yet to hear a controller or CFO express delight in the prospect of another ERP deployment. Even so, a significant number of people evaluate the ERP marketplace each year with a view to better automating their accounting and operational functions. This seemingly benign process can bring its own cost, frustration, and risks. Certainly, making the wrong decision can be costly in terms of investment and personnel time to not meet the organization’s expectations. This topic could easily fill two or three newsletters. However, for those considering their options, the focus here is only on the most significant developments that are in the ERP space for contractors.

In no particular order, these developments include a lack of support for manufacturing/fabrication functions, sufficient project management functionality, an open architecture for integrating with other applications and publishing tools that provide a higher level of capability than typical report writing.

AP Invoice Automation

Does your company still receive paper invoices that are manually routed for approval or scanned/emailed to approvers? Or does your organization have an automated routing solution in place yet still feels like much of the employee’s time is spent on the invoicing process? You are not alone; a high percentage of construction companies today spend a significant amount of financial and human resources on this process. It is estimated that accounts payable personnel can spend up to 60-80% of their time on this task and Burger Consulting Group (BCG) often sees companies add administrative headcount to help manage the payables. While this can be effective to some extent, this approach is also a costly solution. A recent client who is a specialty contractor with over $1B in revenues has 35 personnel dedicated to AP functions, much of it handling invoices.

Invoice automation is not always at the forefront of a contractor’s priority list. Burger Consulting Group highly recommends companies to evaluate their AP processes and consider automation. In our experience of working directly with clients, having the right solution in place resulted in a significant reduction of costs associated with invoice processing as well as improved controls. Invoice automation eliminates 95% of manual tasks, creating process efficiencies, and cost savings. There are several approaches possible from using the invoice routing function within your ERP solution, to acquiring a third-party invoice processing solution with integration into your ERP AP application. Either approach is preferable to scanning, routing, filing, following up, asking for duplicates, updating spreadsheets, and fielding vendor calls. All common functions in the absence of an automated invoice processing solution.

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